Q&A: Costa Rica's new president woos Silicon Valley tech firms

Luis Guillermo Solís shattered Costa Rica's two-party system when he was elected president in a third-party landslide and took office one month ago, promising to grow the economy, share the wealth and fight corruption.

The new president, 56, a former diplomat, professor and political party activist, came to Silicon Valley on Monday to promote high-tech investment in his country, and he spoke to this newspaper at the Hilton Santa Clara. Here are some excerpts, edited for clarity and length.

Q: I understand that you've never held elective office before. Was that a plus or a minus?

A: I think it was a big plus, because people in Costa Rica were looking for change. And one of the changes that was obvious about my candidacy was the fact that I was not a professional politician.

Q: What did you promise the voters?

A: I promised three things: Make the economy bigger, distribute wealth more equally and recover transparency in government. Those were three pillars of what I called the "Rescue Plan."

Q: What do you mean by "recover transparency"?

A: Ethics in public function, putting ethics at the heart of politics.

Q: What would you like to accomplish as president?

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A: I would like to see my people regain confidence in democracy. People, I think, had the impression that it was not possible to have an honest government and a government that could do things and could accomplish things. I'd like to push that agenda a little bit. In the last 25 years the country has changed a lot for the better and also for worse.

Q: How has it changed for the worse?

A: The unfair distribution of wealth has grown in the country. We have seen the country stagnate, at 23 percent-something in poverty rates, which we ought to diminish.

Q: Costa Rica has one of the largest middle classes in Central America, and yet many of the people I've mixed with there are somewhat poor, with no access to higher education. How do you lift those people up? How do you grow the middle class of Costa Rica?

A: Well, I think you're pointing at two different phenomena. One is the fact that the country is more fragmented today than what it was. Illiteracy rates: Basically you don't have any in Costa Rica, it's a 3.3 percent illiteracy rate overall. But if you go to Talamanca, where most of the indigenous population is, the rate rises to 25 percent. If you take the case of rural women vs. urban women, or you do the exercise of comparing youth statistics with older-people statistics, in terms of poverty rates, you'll find that the differences are significant.

The other phenomenon has to do with poverty resulting from economic and social exclusion. It's a model that generates a lot of wealth, but it concentrates most of that wealth. And now it's time to look for possibilities to spread that out.

Q: Why are you in Silicon Valley?

A: I'm here because Costa Rica has had a long relationship with companies, with investors in this area, especially with Intel. We have a number of important companies located in Costa Rica.

Q: Speaking of Intel, they just closed a factory, and I believe laid off 1,500 people?

A: No, they didn't close the factory, they closed part of their operations there, they kept 1,500, in fact, and yes, the layoffs were 1,500 as well. So they're not gone, they just took part of their operations away.

Q: Why?

A: Because of their global priorities. They decided that they have to move around a little more and they moved these operations to Asia, but it had nothing to do with the conditions in the country but rather with these new challenges that they were facing.

Q: And so you spoke to VMware today?

A: Yes, I visited Cisco, VMware and Intel, and we will see Hewlett-Packard.

Q: Do they have an Apple store in Costa Rica?

A: Oh, yes, about five.

Q: Why would you say that Costa Rica is a good place for foreigners to do business?

A: Four reasons: Political stability, which is a very important thing. Secondly, security -- personal as well as technological. Costa Rica is currently the safest country in Latin America. Thirdly, because of the high quality of its labor force, which I think is very important. And fourthly, we are close (to the United States), we have a free-trade agreement and we, in many cases, have the same time zone.

Q: What are some of the obstacles and downsides to doing business in Costa Rica? Red tape, corruption?

A: Yes, I think, both. Making decisions -- it's not red tape exactly but entanglements, political entanglements that make it difficult at times to make fast decisions. But I think we're coming around in all those areas.

Q: My friends will be very angry with me if I don't ask you about Costa Rica's chances in the World Cup.

A: We're going to do our utmost effort to classify. It has happened in the past. We have a good team and they're very enthusiastic. They departed today for Brazil, to play with Uruguay, first. The group is a complicated group: England, Italy and Uruguay. So it's going to be a tough challenge for Costa Rica, but we have done it before and I think we can do it again.